Published:
30-Nov-06
Liberty Global is to fold its UPC Belgium cable operation into Telenet, the Flemish cable group in which it holds a 28 per cent stake. Liberty will sell UPC Belgium to Telenet for €187m, representing approximately 10 times UPC Belgium's operating cash flow (excluding the broadband division). Transaction is subject to approval by the Telenet board and to completion of due diligence, both of which are expected by end of 2006. In early November 2006, UPC acquired a further seven per cent stake in Telenet, taking its total holding in the company to 28.07 per cent.
Our take...
Although initially seeming to be a rather surprising move from Liberty Global after it so recently acquired such a large stake in Telenet, there are a number of reasons why the deal makes sense for Liberty Global. The company has already stated its intention to consolidate Telenet into subsequent UPC financial reports and presumably the merger following completion of this deal will result in cost savings, eliminating the need for duplicate administration.
Belgium,
